The 2022 Report on The Development of China's Music Industry was released at the 8th Music Industry Forum held in Beijing on May 19. According to the report, the total scale of China's music industry in 2021 reached approximately 378.76 billion yuan or $54.9 billion, a year-on-year growth of 8.54 percent. 

Music giant Tencent Music Entertainment (TME), which owns QQ Music, Kugou and Kuwo, published its financial results for the first quarter of 2023 on May 16, eyeing a robust growth of the music streaming business. Revenue from music subscriptions in the first quarter grew by 30.4 percent year on year to 2.6 billion yuan ($378 million), according to the report. Specifically, the number of subscribers increased by 17.7 percent year on year to 94.4 million, which took online music paying ratio to a record high at 15.9 percent.

The growth of streaming revenues indicates the segment's growing influence in China's overall music industry.

"TME's strategic emphasis on quality growth propelled strong growth of our online music revenues in the first quarter. The revenue of online music services caught up with social entertainment services for the first time this quarter. The company is committed to developing a sustainable online music business model," TME executive chairman Cussion Pang said at a briefing.  

When it comes to the sustainability of music business, content is always crucial. In the first quarter, China observed the rising popularity of original musical works for iconic films, games, and animations, as well as independent creators on audio streaming platforms.

Music platforms have leveraged diversified streaming services to boost the exposure and influence of talented artists and their original works with the help of short videos and animation IPs. For example, Tencent unveiled a new initiative on its Musician Platform called the "Emerging Force Program". The program offers traffic support, revenue sharing, as well as online and offline performance opportunities to local musicians.

Meanwhile, as AI-generated content disrupts the industry, China's music market is riding the wave to promote high-quality development of smart technologies. Chen Duan, head of the Digital Economy Integration Innovation Development Center of China's Central University of Finance and Economics, has said that digitalized music products should be the result of efficient platform operation, AI-generated content technologies, and diverse cultural resources.  

"As an industry pioneer, Tencent has been working on an array of AI products ranging from chatbots to music generation tools by further exploring large language models," said Ross Liang, TME CEO. He added that they've energized the platform ecosystem with a broader range of AI-generated content applications, aimed at meeting Chinese users' diverse and nuanced music tastes in new and exciting ways.

Recorded music revenues rose 9 percent in 2022 to $26.2 billion globally, with an increase in paid subscription that has helped drive sales, according to the International Federation of the Phonographic Industry Global Music Report 2023. China nudged into the top five global markets for the first time this year, with its streaming media — supported by a large base of subscriptions, price advantages, and variety of platforms — serving as the major force driving the music market.